Friday, October 25, 2013

This content was originally posted on the Buffini & Co. website. It was written by Joe Niego, the Buffini & Co. presenter and trainer. You can find the original post here.

Generally speaking, yesterday’s market moved at a slower pace and the MLS was overloaded with homes for sale – many of them foreclosures or short sales. Prices adjusted downward and people seemed nervous to “buy into” an unstable market.

Today, however, there’s a sense of better times ahead. We’re seeing multiple-offer presentations and there are more buyers than homes available! Inventory is limited and it requires more work to find your buyer a home. The lesson here is: different markets require different approaches, strategies and skill sets.

How did we get here?

I (Joe) sell real estate in the Midwest – a region that’s usually last to feel an economic up or downturn. But our market is definitely starting to feel this inventory shortage. As I travel coast-to-coast talking to real estate agents, I can tell you that many regions are already experiencing this phenomenon in full force: California, Nevada, Arizona, Texas, Massachusetts, Virginia, Florida and even markets in Canada.

The five economic factors causing an inventory shortage

1. Slowdown of New Construction Starts

In the U.S., 1.6 million new construction homes must be built each year just to keep up with current demand (due to population growth, homes lost to natural disasters, tear downs, etc.). Over the last five years the U.S. has averaged approximately 600,000 housing starts per year. That’s a million homes short – each year! You don’t need to be a mathematician to realize this is a contributing factor to our current inventory shortage.

2. Re-entry of The &lduqoBoomerange Buyer”

A Boomerang Buyer is a homeowner who had trouble weathering the recession and as a result, lost their home to a foreclosure or short sale. These people are rebuilding their credit, however, and seven in 10 will return to homeownership within eight years of their foreclosure or short sale. Do the math; they are re-entering the market now! They represent over 20 percent of buyers in California, over 30 percent in Arizona, Nevada and Florida, and we’re starting to see a larger percentage of Boomerang Buyers here in the Midwest. So the re-entry of the Boomerang Buyer is causing an intense demand for homes, furthering the impact on inventory.

3. Arrival of The Echo-Boom Generation

The Echo Boomers are the offspring of the Baby Boom generation. There are 80 million of them and they are between the ages of 18 and 31. Why is that so important? Because the average age of a first-time buyer is 30 years old. What this means is there’s a massive conveyor belt of demand moving your way. And it’s just started up.

4. Increase in Life Expectancy

Good news for all of us: people are living longer! According to the U.S. Census Bureau, life expectancy in 1970 was 71 years old. The projected life expectancy in 2015 is 79 years old. As we grow older we’ll still need a place to live, which results in fewer available homes on the market.

5. Increase of Immigration And Population

It’ll come as no surprise, North America is still the promised land for many people. Population and immigration growth – both in the U.S. and Canada – are ticking upward with no end in sight. More people means more housing needs. It’s that simple!

So from a macro-economic perspective, these are the five forces affecting the market. The bottom line is, markets are experiencing a housing shortage, and if you don’t feel it yet, it’s coming.

As I mentioned, new markets create new challenges, but they also create new opportunities. This new market demands a new solution, and here it is: you must create your own inventory.

The days of sitting in the office, checking the MLS and waiting for other agents to bring you listings to show your buyer are over. You need to get out into the market. And you need to be strategic in your approach to acquiring more listings.

What are you going to do about it?

Are you feeling the pinch of the inventory shortage? If not, what are you doing to prepare for its inevitable arrival? Over the past couple of years, Brian would talk to me about sharing the strategies and resources I had used to generate listing opportunities in difficult markets. To be honest, I was reluctant at first because I knew it would require a tremendous amount of time and energy; two resources I had already maxed out.

However, after a number of conversations, Brian’s ability to persuade, and a lot of thought, I made a commitment: I would formalize a 10 strategy system to help real estate agents generate three additional listings each and every month. I did, and it’s here.

Friday, October 18, 2013

If you’re on the selling side of today’s real estate market, these 5 tips will help you sell your house, stat!

We’ve all heard about how “bad” the real estate market is. But what’s bad for sellers can be good for buyers, and these days, savvy buyers are out in spades trying to take advantage of the buyer’s market. Here are a few thing you can do to helpsell your house.

1. Audit your agent’s online marketing. 92% of homebuyers start their house hunt online, and they will never even get in the car to come see your home if the online listings aren’t compelling. In real estate, compelling means pictures! A study by Trulia.com shows that listings with more than 6 pictures are twice as likely to be viewed by buyers as listings that had fewer than 6 pictures.

2. Get real about pricing. Today’s buyers are very educated about the comparable sales in the area, which heavily influence the fair market value of your home. And they also know that they’re in the driver’s seat. To make your home competitive, have your broker or agent get you the sales prices of the three most similar homes that have sold in your area in the last month or so, then try to go 10-15% below that when you set your home’s list price. The homes that look like a great deal are the ones that get the most visits from buyers and, on occasion even receive multiple offers. (Bidding wars do still exist!)

3. Listen to your agent. If you find an experienced real estate agent to list your home, who has a successful track record of selling homes in your area, listen to their recommendations! Find an agent you trust and follow their advice as often as you can.

4. Get clued into your competition. Work with your broker or agent to get educated about the price, type of sale and condition of the other homes your home is up against. Attend some open houses in your area and do a real estate reality check: know that buyers that see your home will see those homes, too – make sure the real-time comparison will come out in your home’s favor by ensuring the condition of your home is up to par.

5. Post a video love letter about your home on YouTube. Find an affordable videographer and walk through your home AND your neighborhood, telling prospective buyers about the best bits – what your family loved about the house, your favorite bakery or coffee shop that you frequented on Saturday mornings, etc. Buyers like to know that a home was well-loved, and it helps them visualize living a great life there, too.